Without a strong Vanadium recovery, 2024 will be another challenging year for Largo. It’s already past mid-June and the benchmark V2O5 average price is still in the US$5/lb range. If Largo could survive 2024 then the future would likely be bright from 2025 onward. And it a big "if".
FastMakets, MB: Green ferro-alloys to create new opportunities for China | 2024 preview
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Green development to drive more vanadium demand
Vanadium will remain oversupplied globally in 2024, according to Chen Donghui, deputy secretary-general of the vanadium section of the China Iron & Steel Association (Cisa).
According to industry sources, the use of vanadium pentoxide in crude steel production is decreasing, in line with the slower growth of the real estate industry in China in 2023 compared with 2016-22. Rebar production in 2023 was lower than in 2016-22.
“More than 80% of vanadium is used in steel production. The downbeat message from real estate sectors in China still weigh on vanadium prices,” a China-based vanadium trader source said.
“[Taking into consideration the ambitions for] ‘carbon peak’ and ‘carbon neutrality’, the vanadium industry will enter a period of transformation and development in 2024,” Chen said.
“[This will be] characterized by less vanadium use in steel sectors and more vanadium use in non-steel sectors,” Chen added. “More vanadium will be used in green energy in 2024, including vanadium batteries, which command less than 1% of the energy storage industry, while lithium batteries have 96.5%.”
According to industry sources, vanadium battery technology will probably boom in 2025. It is estimated that global vanadium energy storage uses will consume approximately 45,000 tonnes per year of vanadium pentoxide.
“Many vanadium market participants have a promising outlook for the development of vanadium batteries,” a second China-based vanadium trader source said, “given that overall policies have gradually shifted to greener technologies and energy, which may be a huge driving force for the wider application of vanadium batteries [in 2024].”